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THE RECRUITMENT INDUSTRY’S ROLE IN THE UPTAKE OF NEW BBBEE REQUIREMENTS

Posted By APSO, 15 June 2015
Updated: 11 June 2015

THE RECRUITMENT INDUSTRY’S ROLE IN THE UPTAKE OF NEW BBBEE REQUIREMENTS

Polarity.org.za

One of the legacies of Apartheid in South Africa is the unequal distribution of wealth between its white and black populations. Connected to this is gender and racial disparities in education and skills levels.

On 5 May 2015, the Department of Trade and Industry (“DTI”) released Notice 396 of 2015 (“Clarification Notice”) to clarify the position of the DTI with respect to the recent amendments to the Broad Based Black Economic Empowerment (BBBEE) Act. The clarification notice states that the Amended Codes became effective on 1 May 2015.

The amendments to the Codes fundamentally change the current BBBEE framework and significantly change the manner in which a firm’s BBBEE status (or level) will be calculated, as the number of BBBEE points required to achieve a particular BBBEE level has been increased.

The Federation of African Professional Staffing Organisations (APSO) is committed to the upliftment and professionalisation of the labour recruitment industry in South Africa.  KC Makhubele, Vice President of APSO says, “Planning for BBBEE should never be underestimated and should be seen as a tool that can increase employment opportunities and boost business growth.”

Makhubele explains that the purpose of the legislation remains to assist with the entrance of previously-disadvantaged people into the economy, in order to contribute to our national economic growth.

He says, “Human resources development, which encompasses employment equity and skills development, forms part of the core strategies for bringing about BBBEE in South Africa. These elements are, in fact, given significant weighting in determining the extent to which an enterprise contributes towards BBBEE. In terms of the Generic Scorecard, employment equity and skills development each account for 15 % of the BEE weighting of an enterprise.”

“Staffing and recruitment companies provide a great service in assisting businesses in reaching their BBBEE targets.”

Makhubele notes that not only do more candidates approach staffing and recruitment companies over corporate companies themselves – giving recruiters access to a bigger pool of talent to select from – but the interview and on-boarding process is also quicker when partnering with a reputable staffing company.

He says, “Recruiters also spend more time interviewing and developing candidates. Through temporary and contract employment BBBEE candidates gain much needed experience in order to enter the permanent market.”

“Businesses who share their staffing strategy and overall business objectives with their staffing partner will also ensure that these targets are prioritised, and met,” Makhubele adds.

For this reason, Makhubele stresses that staffing and recruitment companies should be seen as a strategic partner. “Get to know your recruitment suppliers and ensure they know you, your corporate culture, your vision and values.”

“If organisations really want the very best talent while getting its identified BBBEE talent up to speed, a recruitment agency can provide highly skilled contract staff or recently retired staff who have a huge amount of experience to pass on to up-and-coming BBBEE candidates,” he concludes.

Tags:  Amended Codes  APSO  BBBEE  BBBEE targets  BEE  business objectives  Department of Trade and Industry  disadvantaged  DTI  economic growth  employment opportunities  framework  Generic Scoreboard  Human Resource Development  legislation  recruitment  requirements  staffing  staffing solutions 

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Performance Managing your Recruitment/Staffing Providers

Posted By Natalie Singer, 06 June 2013
Updated: 06 June 2013

Most companies have structured performance review systems in place for their employees but only a handful have anything to assess their recruitment/staffing provider.

Recruitment costs are significant and whilst many companies have strict tendering requirements and service level agreements in place with their preferred suppliers, too few have a system to accurately assess delivery. After all, what do you measure?

  • Price / Spend?
  • Number of CVs submitted per vacancy?
  • Number of interviews set up with candidates?
  • Number of placements?
  • Success of the placed candidate over a period of time, i.e. 6 months?

People are not products

Applying simple service delivery assessments, as associated with products, doesn’t work. People are by nature flexible, unreliable and open to a myriad of things that can change their circumstances and affect their employment. You can’t say that if "employee A” doesn’t work out the provider should simply substitute with "employee B”, as would be the case with a defective product. 

Most of the staffing industry provides a form a guarantee but companies are cautioned against viewing this as a guarantee on the individual. After all, no one can predict what another person will do in the future. Rather, this guarantee should talk to the delivery of the service that has been agreed between the provider and the client. For instance, it would not be reasonable to expect an agency to replace a candidate who suddenly becomes ill and incapable of doing the job, except if it could be proven that the agency knew about the illness and purposely did not disclose this to the client, knowing full well that the placement would not be successful.

The controllable aspects are the recruitment methodologies and due diligence undertaken by the agency in assessing the candidate, not the decisions of the candidate or employer once the placement has been made.

Avoid comparing apples with oranges

On the surface most recruiters seem to be offering the same service, but don’t be fooled. There are a myriad of different recruitment methodologies and clients should ensure that they fully understand what they’re buying. When assessing a provider, ask the following questions:

  • What is their area of specialisation?
  • Can they prove success?
  • How do they source their applicants?
  • What processes are followed to screen applicants?
  • Method of interview, assessments, verification checks etc
  • What is the experience/expertise of the consultant assigned to manage the account?
  • What kind of success do they have in terms of placement and do their candidates remain in employment for a significant period of time?How much do they know about your business?
  • Will they be able to effectively source people who not only meet the technical requirements but would also be a good "culture fit”

It may be worthwhile to invite interested providers to do a formal presentation to your HR team. This way you can access their level of expertise, question their methodology and determine whether there is a "fit” for a mutually beneficial partnership going forward.

Annual Reviews

There is no point in having a preferred supplier list as long as your arm if the companies on it are not performing. Spend time each year assessing the suppliers against your expectations and their actual delivery and chop those that haven’t made the grade.At the end of the year, ask yourself the following questions:

  • Which agencies actually made placements in the past year? Remove any that haven’t.
  • Of those who made placements, what kind of placements did they make? For example, have the tended to excel in placing IT people, finance, or technical? Separate your suppliers into subject-matter experts. Keep these lists separately and only send them specs for relevant positions, rather than the shotgun approach of sending all specs to everyone on the list.
  • Of the candidates who were placed, how many did not make it through the probation (or guarantee) period? Interrogate why this happened? Was it related to poor recruitment, or something else? How often has it happened per agency? If the problems appear to be with the initial recruitment process then consider ditching agencies that consistently don’t perform.
  • How many of the placed candidates have proven to be value-added employees who are contributing to the overall goals of the organisation? These are the agencies you want to work with so invest time in these relationships.

A shorter list of specialised providers is not only easier to manage, but you’ll be surprised at the increased quality levels that will come from providers who are no longer competing with every Joe Soap and who feel they can invest time and effort in developing long-term relationships with you.

Tags:  agency  APSO  assessment  candidate  CV  guarantee period  interview  performance management  placements  preferred supplier listing  recruiter  shortlist  skill  staffing  verification 

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The Tipping Point: SA staffing industry on verge of drastic changes

Posted By APSO, 06 June 2013
Updated: 06 June 2013

This article first appeared in the Global Recruiter magazine in June 2012

The South African staffing sector is facing many changes, not least of which is the impending legislation being driven by Government to curtail the use of Temporary Employment Services (TES) and to limit the impact of flexibility in the workplace. Unfortunately the political will to push this legislation largely, it appears, to appease political allies within the trade union movement and achieve ideological goals, goes against the drastic state of a labour market that is characterised by frightening levels of unemployment, education system failures and struggling, disillusioned businesses.

Mission Critical: Reduce unemployment

At the heart of South Africa’s many problems lies the ever-increasing scourge of unemployment. All of Government’s plans, most especially the National Development Plan, released in mid 2010, focus on the need to create millions of jobs in the next decade. This will not be possible if the proposed labour legislation amendments were to be passed.

South Africa already struggles to compete favourably with our African neighbours and BRIC counterparts in respect to education standards, labour relations and productivity, and unless we create an environment that businesses – both local and International – believe is conducive to economic success, we will not stimulate the economy and attract the much-needed foreign direct investment required to have a real impact on job creation.

According to the Labour Market Performance Report for First Quarter 2012 released by the University of Cape Town’s Development Policy Research Unit, the initial labour market recovery observed in 2011 is faltering. The unemployment rate, calculated on the expanded definition to include those who are disillusioned as well as those actively seeking work, stands at 33.8%, more than seven percentage points higher than the pre-recession low of 26.6% measured in the fourth quarter of 2008.

Youth: A ticking time bomb

Throughout the world youth unemployment is a critical factor and none more so than in South Africa where high levels of unemployment are being experienced amongst the youth. The report sets unemployment rates amongst 15 – 24 year olds at 62.4%, nearly double the national average and 25% higher than the rate for 25 – 34 year olds. 

The education system is failing desperately and many young people are exiting the secondary education system with Matric certificates yet still functionally illiterate. Skills development in the workplace therefore becomes essential and adds a significant burden, both cost-wise and administratively to employers, who would rather engage with a more mature worker.

The economic slowdown and existing draconian labour legislation has resulted in the inability of the South African labour market to generate sufficient numbers of jobs, especially for younger, less experienced workers. Employers are simply too afraid to "take a chance” on a younger worker, for fear that it does not work out.

Curtailing the use of TES will have a direct negative effect on access to employment for young people as the PrEA industry is proven to be a stepping stone to gather work experience, access additional skills and training and to secure permanent employment.

Enforcement is the real issue, not lack of legislation

South Africa is recognised to have some of the most rigid labour legislation in the world. The 2011 World Employment Forum ranks South Africa 138th (out of 139 countries) in both Flexibility of Wage Determination and Cooperation in labour-employer relations. We also rank worst, 139th, in respect to Hiring and Firing Practices. This clearly outlines the fact that our existing regulations are already too stringent in this economic climate.

The real issue however is in relation to compliance and enforcement. Currently, those companies who operate outside of the legislation, are not being investigated and punished and there is no real effective deterrent for non-compliance. Extensive research, conducted globally by the Boston Consulting Group, proves that over-regulation of any labour market – established or emerging - leads to a direct increase in the number of non-compliant "underground” operators and a decrease in employment in the formal sector where the highest levels of compliance exist.

Organised business in South Africa is highly concerned that attempts to further regulate the labour market, resulting in over-regulation, will only serve to increase the cost burden on the already compliant, thereby increasing the non-compliant element. This will have a severe impact on the number and quality of the jobs in South Africa. As costs increase, compliant businesses will simply seek opportunities to reduce the number of people employed through automation and mechanisation, thereby resulting in the loss of more decent jobs.

The "f-word” - Flexibility

Government and unions in South Africa, and elsewhere in the world, are struggling to come to terms with the changing world of work and the increasing use of flexibility within the labour market. Gone are the days that an individual was employed ‘for life’ at a single employer with full benefits and a gold watch on retirement. Chronic skills shortages, increasing global competition and improving technology have created a labour market that favours flexible, project-based employment. This more flexible labour model need not mean precarious work.

"Flexicurity”, a concept coined in Europe, promotes the balance between flexibility and security for the employee through effective regulation and the availability of suitable social protection schemes.Companies, in order to remain competitive, are choosing to outsource their non-core functions and to bring specific skills, for specific projects, in "just-in-time”. The nature of these employment relationships varies but is most often defined as "a-typical”.

To effectively manage the sourcing, recruiting, assessing and administering of flexible labour, businesses have turned to specialists, in the form of Temporary Employment Services (TES) companies. And South Africa is no different.PrEA is a significant contributor to the South African economy.

The Private Employment Agency Sector (PrEA), including Temporary Employment Services (TES), is a significant contributor to the South African economy. In addition to facilitating smooth transitions for workers between jobs, and assisting employer companies to remain competitive in tough economic times, it is also one of the largest contributors to skills development in the country.

A snapshot of the South African PrEA sector:

  • Introduced 5.4 million people to the world of work since 2000
  • Gateway to the world of work: Profile of work seekers/candidates:

o   Never previously employed: 57%

o   Youth aged 18-35: 83%

o   Previously disadvantaged: 93%

  • Average of 994 000 people deployed (via TES) on a daily basis
  • Of those initially employed as a temp, each year significant numbers are permanently deployed

o   30% within 1 year

o   42% within 3 years

  • One of the largest contributors to skills development – R415 million paid over in skills levies
  • Nearly 20 000 registered learnerships facilitated (30% of SETA total)

Proposed legislation threatens job creation goals

The proposed changes to the legislation, in particular the curtailment of the use of a-typical employees (temporary, fixed term and part-time) by limiting the time of employment to 6 months, before being considered to have all the rights associated with permanent employment, including access to benefits, will have dire consequences on the labour market.

It is estimated that in excess of 3 million people are employed in a-typical arrangements in South Africa and the local labour market is simply not able to absorb all of these. Further, the poor drafting of the proposed legislation has already led to confusion in the marketplace with different lawyers interpreting the drafts differently. This uncertainty, rather than specific legislative amendments, is more likely to cause a loss of jobs as companies battle to come to terms with administering it within their organisations.

Social dialogue between Government, business and labour has unfortunately not been fruitful and many areas of disagreement still exist. Unfortunately, with the ruling party’s policy conference, leadership debate and national elections pending, it is likely that the legislation will be pushed through in the next several months.

The staffing sector, in particular will need to adapt to the new environment and whilst it will not result in an outright ban of the TES sector, higher compliance regimes, complex legislation and increasing costs will likely impact the smaller operators and cause a consolidation within the staffing sector.

Commitment to professionalisation of the PrEA sector

The industry has long advocated the need for specific regulation to govern the PrEA sector. We are committed to regulation that is fair, effectively enforced and that recognises the dynamic nature of labour markets today. At this stage the internal political wrangling within Government and its allies is likely to have a direct impact on the acceptance and implementation of the proposed legislation.

We will simply have to see what the practical impact and resulting consequences will be.The Federation of African Professional Staffing Organisations (APSO) remains committed to working with stakeholders to establish an effective regulatory framework and to support our members in coping with the changes to ensure sustainability within their businesses.

Tags:  APSO  enforcement  flexibility  labour law amendments  recruitment  South Africa  staffing  unemployment  youth 

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